Sectors to watch as China Raises Oil Processing 12% to Meet Demand
In this schizophrenic market and with the averages having taken some punishing blows, its hard to recommend anything to the long side. However, I believe this piece of news should be followed for possible beneficiaries off this move.
I’m not a commodity trader, so I won’t pretend to be able to call oil going to $50 or going to $100, but refined petroleum products in this case might benefit refiners and oil shippers. Refiner capacity is not just shorthanded in the U.S. where we haven’t built a refiner in decades, but not enough refiners are being build worldwide to keep up with demand. According to comments made in the past by Valero, this means oil might be refined on one continent where the refinery is and shipped to wherever the gasoline is sold. Also, this is another validation that there is a significant shortage of oil processing facilities, confirming the strong backlog by engineering and construction companies who build such facilities. Read the rest of this entry »
